East Coast wind farms: Deepwater Wind and Cape Wind are close to construction.

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March 4 2013 10:07 AM

Smooth Sailing for Offshore Wind?

Two firms are planning to start construction off the East Coast within the year.

A seagull flies past wind turbines at Thanet Offshore Wind Farm off the Kent coast in southern England.
An offshore wind farm in England

Photo by Stefan Wermuth/Reuters

The temperamental waters off Rhode Island’s Block Island may be known for the Pequod and other Moby Dick-style whaling ships, but soon they could become notable for something else.

If all goes as planned, Deepwater Wind, a Providence, R.I.-based energy firm, could become the first company to start construction of a wind turbine farm off of the East Coast. By the end of this year, five turbines, each nearly as tall as the Washington Monument, could start taking shape about 3 miles off craggy Block Island and some 18 miles from the mainland.

The goal, says Jeff Grybowski, Deepwater Wind’s chief executive, is to demonstrate to the financial community that offshore wind is “doable.” That is the key word. While coastal waters of state-subsidy-rich Western Europe are chock-a-block with wind turbines, offshore wind energy in this country is still waiting for the first breeze.

High costs, infuriatingly complex regulatory approvals, a lack of government financial support, and environmental opposition have badly impeded what otherwise may seem an obvious and attractive alternative to fossil fuel and nuclear power. Offshore wind gives off little or no pollution and contributes next to nothing to global warming. Its chief drawback is that it can be a hazard to migratory birds—that, and the worry that wind turbines can ruin spectators’ sea views.

Now, however, the fledgling wind industry is showing signs of life, including the possible construction starts for two projects and the first-ever federal competitive bidding of locations for new wind farms off of New England and Virginia set for later this year. President Barack Obama specifically gave offshore wind a boost in his State of the Union address on Feb. 12. By some estimates, East Coast wind could eventually generate 127 gigawatts of power—enough to meet half of the energy needs of coastal states.

A second firm, Cape Wind, likewise plans to get construction started by later this year or in early 2014. It is the country’s first firm to propose a large offshore wind farm, planning a 420-megawatt project in Nantucket Sound. It has received its final regulatory approvals and is ready to seek large-scale financing in this year’s third quarter, says Cape Wind spokesman Mark Rodgers. It could be a toss-up whether Deepwater or Cape Wind, operated by Boston’s Energy Management Inc., becomes the first to start building.

Also later this year, the federal government is to start its first competitive lease-sales of some 164,750 acres 9.2 miles off the Rhode Island and Massachusetts coasts and 112,800 acres about 23.5 miles off the Virginia coast. (The Deepwater and Cape Wind projects did not involve bidding.) The two federal tracts to be auctioned off could eventually host enough turbines to generate 4,000 megawatts of power or enough to supply 1.4 million homes.

Deepwater and other firms are interested in the northern project, while eight companies, including Spain’s Iberdrola SA and Richmond, Va.-based Dominion Virginia Power, are eager to participate in the Virginia lease-sale that will be held by the Bureau of Ocean Energy Management. “They are very motivated to get the auction going,” says Guy Chapman, head of Dominion’s offshore wind generation team.

Yet another project, called Atlantic Wind, which includes computer search-engine titan Google, hopes to get a project that could eventually produce 3,000 megawatts of power off the coast of New Jersey. The first step is to build a 189-mile transmission line that would allow turbines to be placed farther offshore and could be robust enough to withstand the superstorm Sandy-type hurricanes.

A flood of unexpectedly cheap natural gas could put a damper on offshore winds’ fresh enthusiasm. Electric utilities may find it cheaper and easier to enjoy cheap gas while they can and put off more costly investments in alternatives, at least in the near term. “There’s some truth that the decline in gas prices has changed people’s perception about the urgency of renewables,” says Grybowski. But, he adds, wind advocates have learned to think in the long term. “The Massachusetts Department of Public Utilities is not comparing us with natural gas or coal but with solar and other alternatives,” he says.

The Northeast is the incubator for U.S. offshore wind for several reasons. Geography helps because electricity has trouble traveling long distances. Offshore turbines would be close to densely populated urban areas such as New York and Boston that have a high demand for power but not much space to build more big facilities such as nuclear or coal-fired power stations.

Local weather conditions are a plus. Offshore winds tend to pick up in intensity during the late afternoon during summer months when electricity demand is highest. Otherwise, winds off the Northeast coast are steady. A University of Rhode Island study showed that over 25 years, winds measured off Buzzard’s Bay blew at a regular 15 mph clip—a pace that beats wind rates inland.

Another favorable reason is that Northeastern states are strict regulators and have set goals of ensuring that a significant minority of the power used by the utilities it oversees comes from alternative energy. New Jersey, for instance, has mandated that 22.5 percent of its power come from renewables by 2021. Farther south, the goals are looser. In Virginia, they are entirely voluntary, although North Carolina has a mandatory 12.5 percent renewable energy source goal.